Former Yugoslav Republic of Macedonia Country Brief
Bilateral relations
Australia recognised the former Yugoslav Republic of Macedonia on 15 February 1994, using the nomenclature the former Yugoslav Republic of Macedonia in accordance with the terminology used by the United Nations (UN). Australia and the former Yugoslav Republic of Macedonia agreed to establish diplomatic relations on 20 October 1995. The Australian Ambassador is resident in Belgrade and an Australian Honorary Consul was appointed in Skopje in May 1998.
The 2006 Census recorded 83,978 people of former Yugoslav Republic of Macedonia ancestry in Australia. A large dual-national community also lives in the former Yugoslav Republic of Macedonia, predominantly in the town of Bitola.
In May 2005, Dr Ilinka Mitreva, then Foreign Minister for the former Yugoslav Republic of Macedonia, visited Australia as a Guest of Government.
Bilateral trade and investment
Australian trade and investment with FYROM is negligible. In 2007-08 Australian exports to the former Yugoslav Republic of Macedonia were valued at A$3.9 million, with imports at A$2.3 million. Prams, toys, games and sporting goods continue to be Australia’s largest export commodity. Imports to Australia mainly comprise clothing and a range of food products, in particular, preserved vegetables.Though investment levels are low, there has been some interest by Australian companies in investing in the insurance (QBE), tourism (and related services), and information technology (including banking software) sectors.
General background
The former Yugoslav Republic of Macedonia is a landlocked and mountainous country with an area of 25,713 square kilometres (less than half the size of Tasmania). Of the population of 2.1 million, approximately two-thirds are ethnic Macedonians, one quarter Albanians (concentrated in the north-western parts of the country) and there are significant minorities of Turks, Serbs and Roma. Located in the centre of the Balkan Peninsula, the former Yugoslav Republic of Macedonia has borders with Albania in the west, Greece in the south, Bulgaria in the east and Serbia (including Kosovo) in the north.
Political overview
The former Yugoslav Republic of Macedonia declared its independence from the former Socialist Federal Republic of Yugoslavia (SFRY) on 17 September 1991.
The former Yugoslav Republic of Macedonia is a parliamentary democracy with an executive government composed of a coalition of parties from the unicameral legislature and an independent judicial branch with a constitutional court. The Assembly ‘Sobranje’ is made up of 120 seats and the members are elected every four years. The role of the President of the Republic is mostly ceremonial, with the real power resting in the hands of the President of the Government. The President of the Republic is the Head of State, the Commander-in-Chief of Armed Forces and Chair of the National Security Council. The President is elected by majority vote in direct elections, for a term of five years, and may serve no more than two terms as President. The current President Gjorge Ivanov was elected President of the former Yugoslav Republic of Macedonia on 5 April 2009 in the Republic’s fourth Presidential elections since 1991.
The Cabinet or Council of Ministers is elected by majority vote in the Sobranje which comprises 85 members elected by direct popular vote, and 35 from lists of candidates submitted by the parties based on the percentage gained from the overall vote. All members serve four-year terms. The Assembly sits in Skopje and its powers include amending the constitution, passing laws and resolutions and ratifying international agreements.
On 1 June 2008 the centre-right Internal Macedonian Revolutionary Organisation – Democratic Party of Macedonia National Unity (VMRO-DPMNE) led by Nikola Gruevski won the parliamentary elections. A two-party coalition was approved by parliament in July 2008. It includes the VMRO-DPNME and the Democratic Union for Integration (DUI), one of the country’s two main ethnic Albanian parties. Prime Minister Gruevski has set out an ambitious program of economic development and political reform.
Internal Relations
In January 2001, tension between the ethnic Macedonian and ethnic Albanian communities led to a civil conflict between the hitherto unknown Albanian NLA (National Liberation Army) - which had strong ties with the Kosovo KLA/UCK (Kosovo Liberation Army / Ushtria Clirimtare E Kosoves) - and the former Yugoslav Republic of Macedonia security forces. The political crisis led to several outbreaks of armed fighting, particularly in the northwest, and lead to the internal displacement of thousands of citizens.
Since agreement on the issues of minority rights and representation reached in August 2001 under the ‘Ohrid Agreement’ the necessary legislative changes have passed through the parliament and practical implementation is underway. In early 2003, the former Yugoslav Republic of Macedonia government formed a ministerial committee to carry out an action plan to deliver enhanced Albanian representation in state institutions.
NATO maintains headquarters in Skopje, and advises the former Yugoslav Republic of Macedonia Government on security sector reform.
Relations with its neighbours
Relations with the EU and NATO
A key foreign policy objective for the former Yugoslav Republic of Macedonia is to become fully integrated in Euro-Atlantic structures through membership of the EU and NATO.
Negotiations commenced in March 2000 with the EU to conclude a Stabilisation and Association Agreement (SAA), the first major step towards membership of the EU. The SAA was signed in April the following year and Skopje is working closely with the EU to develop and strengthen the former Yugoslav Republic of Macedonia’s institutions and capacity to meet the requirements for accession. The former Yugoslav Republic of Macedonia became an official EU candidate country in late 2005, and hopes to join the EU by 2015.
The former Yugoslav Republic of Macedonia has also sought membership of NATO, signing the Partnership for Peace (PfP) Framework Document in November 1995. Through the PfP, partner countries develop individual programmes of practical cooperation with NATO. The basic aims of PfP are to promote transparency in national defence planning and military budgeting; promote the democratic control of national armed forces; and develop the capacity for joint action between forces from Partner countries and those of NATO member countries, for example, in peacekeeping or disaster-response operations. Recently, the former Yugoslav Republic of Macedonia has contributed military support for allied efforts in Afghanistan and post-conflict Iraq.
Relations with Greece
The former Yugoslav Republic of Macedonia and Greece continue to disagree over the ‘name issue,’ whereby the former Yugoslav Republic of Macedonia refers to itself as the ‘Republic of Macedonia’, but Greece considers this implies territorial aspirations to northern parts of Greece. The former Yugoslav Republic of Macedonia was admitted to the UN in 1993 under the provisional name of the former Yugoslav Republic of Macedonia. This was reluctantly agreed to by both sides pending their final resolution of the name issue.
Economic overview
The former Yugoslav Republic of Macedonia's small, open economy makes it vulnerable to economic developments in Europe and dependent on regional integration and progress toward EU membership for continued economic growth. At independence in September 1991, Macedonia was the least developed of the Yugoslav republics. It remains one of the poorest countries in Europe. Its economy has been essentially dependent on the markets of the other republics of the former Socialist Federal Republic of Yugoslavia, the disruption of which dealt a heavy blow to economic activity in all countries in the region. These problems were exacerbated in the first half of the nineties by the impact of other markets in Eastern Europe undergoing restructuring, the difficulties of economic transition, UN sanctions, and a Greek embargo. The end of the Greek embargo in October 1995 and the lifting of UN sanctions created a more normal economic environment. However, the 2001 conflict seriously affected production, foreign investment and the pace of economic reform.
The collapse of Yugoslavia ended transfer payments from the central government and eliminated advantages from inclusion in a de facto free trade area. Real GDP growth averaged 4 per cent during 2004-06, reaching 5.5 per cent 2008. While maintaining macroeconomic stability with low inflation, former Yugoslav Republic of Macedonia lagged in attracting foreign investment and creating jobs, despite making extensive fiscal and business sector reforms. Inflation reached 5.5 per cent in 2008. Unemployment remains high at 35 per cent.
In the wake of the global economic downturn, the former Yugoslav Republic of Macedonia has experienced decreased foreign direct investment, lowered credit, and a slowdown of export growth. The Government currently predicts a drop in growth in 2009 to around 3 per cent. The current account balance recorded a significant increase from 2.6 per cent of GDP in 2005 to 14 percent of GDP in 2008.
The former Yugoslav Republic of Macedonia was admitted as a full member of the World Trade Organisation in September 2002. It was admitted as a member of the Central European Free Trade Agreement (CEFTA) in 2006.
Last updated: 09/04/2009